Robots and the Economy: Do They Help or Hurt Global Inequality?


SEATTLE — The robotics industry is booming, from manufacturing to healthcare. Already, robots can replace butchers, dairy farmers, pharmacists and household vacuuming. As a multi-billion dollar industry, robotics improves productivity in industries and has created valuable tech jobs in development, software and other sectors. Investment analysts at Bank of America believe that over the next 20 years the global economy will be transformed as robots become more developed and learn to think and develop more human traits. Robots and the economy are already tied together in a direct way. What isn’t for sure is whether or not they will ultimately help or hurt global inequality.

However, this revolution is becoming worrisome for some experts who feel that the costs will outweigh the benefits by eliminating low-income jobs, manual labor and hollowing out the middle class, leaving nothing in its place and exacerbating the extremes of global inequality. An estimated 35 percent of United Kingdom workers and 47 percent of the United States workforce could be completely replaced as a result of this revolution.

It seems that very few jobs are unaffected by the robot revolution. From fast-food customer service to journalism, robots are slowly but surely becoming advanced to the point where they can replace human beings — all while making fewer errors and costing less. That presents a problem because it furthers the inequality gap between classes and pools resources at the top while taking them away from the bottom. When robots and the economy mix it seems beneficial in the long run, but what does a country do with thousands, or millions, of displaced workers who don’t have skills that translate into another industry?

It no longer makes sense to business owners to pay several human beings a living wage when they can all be replaced by one robot that continues to generate money for the foreseeable future. In many industries where creative destruction is common, jobs are more or less moved around. Jobs from blue-collar factory automation translate into technical support and the manufacturing of robots and computers. When one industry is destroyed another is typically created in the process. However, the balance has become more and more skewed with fewer jobs being created for every job lost. When many industries are replaced by a singular one it becomes much more difficult to recoup job losses and global inequality increases.

Two solutions have already been proposed: the concept of a basic universal income and the suggestion that all robots should be taxed like human workers. The latter was suggested by Bill Gates, founder of Microsoft and billionaire philanthropist, who believes that companies should be taxed by the government for their use of robotics technology in an attempt to channel funds to other employment (like child care) and slowly reduce the spread of automation.

“If you can take the labor that used to do the thing automation replaces, and financially and training-wise and fulfillment-wise have that person go off and do these other things, then you’re net ahead,” Gates said in an interview with Quartz Media. “But you can’t just give up that income tax, because that’s part of how you’ve been finding that level of human workers.”

A similar proposal was suggested and ultimately rejected by the European Union on February 16, 2017. The legislation not only asked to support workers displaced by robotics but also called for the establishment of ethical frameworks of liability in, for example, self-driving cars. It is unsure whether another proposal will be attempted in the future but the decision was touted by the robotics industry as a success.

Unfortunately, there is no simple answer or solution. In any industry that undergoes creative destruction, there will be those who come out on top and those who are ultimately replaced. It seems that for the foreseeable future robots and the economy will continue to intertwine. However, as robotics continues to develop and revolutionize the world it is important to keep in mind the humans left behind that robots were developed to benefit in the first place.

Tammy Hineline

Photo: Flickr


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